Life insurance may provide financial assistance when the worst happens, and two main types of life insurance policies are available. If you live in Orleans, IN, we at Busick Insurance Agency LLC can help you understand the difference between term life insurance and whole life insurance. Which one is right for you depends on your needs.

Term Life Insurance: Temporary Coverage with Fixed Term

Term life insurance, as the name suggests, is a type of life insurance that provides coverage for a specific duration, such as 10, 20, or 30 years. This option is popular because of its simplicity and lower initial cost compared to whole-life insurance. 

The premiums for term life insurance are fixed during the policy’s term. If the policyholder survives the term, the policy expires. Some have an option to convert to whole life at that point, but the term ends.

You might use a term policy to provide financial protection should you pass away during key years, such as raising a family. Many Orleans, IN residents, get this life insurance only for when they have dependents.

Whole Life Insurance: Lifelong Coverage with Cash Value

Whole life insurance, in contrast, offers lifelong coverage with the added benefit of accumulating cash value over time. Some of the premiums paid are invested, with the investments generally gaining over time.

Premiums for whole life insurance are typically higher than for term life, but the returns on the investment portion can eventually be more than the policy’s premiums. It’s possible to eventually have a policy that effectively pays for itself if interest income is more than premiums.

Whole life insurance isn’t only a tool for financial protection against death but also a potential component of your long-term financial planning.

Get Life Insurance

Contact us at Busick Insurance Agency LLC for help choosing between term and whole life insurance. We’ll help you decide which makes sense for your situation.